Who wants to be a billionaire?

Jonathan Shapiro

A mobile phone application that tracks the stock picks of Warren Buffett, Carl Icahn and other elite investors has paved the way for small investors to replicate their holdings through exchange-traded product.

Finding out exactly which stocks billionaire investors have been buying and selling has always been possible. But it's never been as easy as with the iBillionaire mobile phone application, which collates and presents 13F regulatory filings, allowing users to track the moves of the elite investors move as they happen.

The app is already a success with 100,000 downloads reached last week, including 5000 from Australia.

The real opportunity for the chief executive of iBillionaire Raul Moreno is the index created with the New York Stock Exchange to track the movements of these great investors that will soon allow investors to replicate their holdings through an exchange-traded fund. The index is comprised of the 30 of the billionaire investors' most widely held large cap stocks.

DOUBLE THE RETURN OF THE S&P 500

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The iBillionaire index has returned 14 per cent per year over eight years, double that of the S&P 500.

"Last year we had a 42 per cent return and we were one in the top one percentile of investors in the US. The returns of the index are excellent and the risk is the same as the S&P 500. It also mathematically proves these billionaires are outperforming the index," Mr Moreno said.

He added that retail investors will be able to invest in an ETF that tracks the iBillionaire index, which will be managed by Direxion.

An investment in the ETF is a great way for get the billionaires to do all the work on the investors' behalf, he said.

"These billionaires are active. They have the contacts, expert and knowledge to be influential at a board level. So by having an index, you will benefit from all these billionaires working for you!"

The billionaires are defined as investors who have a net worth of more than a billion dollars, which they have made through investing in the financial markets, and manage more than a billion dollars.

Among them are Warren Buffett, activist investor Carl Icahn, Third Point's Dan Loeb and Greenlight Capital's David Einhorn.

The qualifying investors must also meet a definition of long-term investing – a turnover of less than 50 per cent – which means George Soros, who trades in and out of positions more frequently, isn't part of the index although app users can follow his trades.

The largest holding on the index is Apple, which has almost 10 per cent.

"The press on Apple has been negative and the stock has lagged but it's up 15 per cent since they announced the stock buyback. If you look at what the billionaires have been saying in the last year, they have been very bullish," Mr Moreno said.

'AUSTRALIA IS VERY INTERESTING TO US'

Mr Moreno said he has already been contacted by Australian product creators to offer the ETF in Australia and might even tailor the index to include some local billionaire investors such as Platinum's Kerr Neilson, who files his transactions in the United States.

"Australia is very interesting to us. There are a couple of billionaires there that we are analysing and thinking of adding to the list," he said.

Ecuadorian-born Moreno spent his early career in investment banking and at a large family office in Miami, which required him to track hedge funds, their performance and their holdings.

He is a self-confessed Buffett fan. One of the insights from tracking these billionaires is how well they know and influence each other. "They talk about each other like girls in high school," Mr Moreno said.

But he said a more profound insight is a "generational change" that is occurring among the elite investors.

"You have Buffett and Icahn that are the older guys, with an obviously good track record. But we are seeing a new generation of Daniel Loeb, David Tepper, David Einhorn. These are the new Buffetts," he said.

"If you had invested in Buffett when he was 40 you would have benefited enormously. What we are seeing is there is a new generation. They are very active, their performance is excellent and their investment style is not 100 per cent Buffett, not 100 per cent Icahn, but they are mixing them into a new style."